On Monday, prices fell from multi-week highs on unexpected weakness in consumer spending data from China, despite strength in industrial output, and as investors moved into a holding pattern ahead of the Fed’s meeting.
U.S. Treasury Secretary Janet Yellen told Reuters on Friday that the U.S. is looking at further sanctions on “dark fleet” tankers and will not rule out sanctions on Chinese banks as it seeks to reduce Russia’s oil revenue and access to foreign supplies to fuel its war in Ukraine.
Both contracts are on track for a weekly gain of more than 3% as concerns about supply disruption from tighter sanctions on Russia and Iran, and hopes that Chinese stimulus measures could lift demand in the world’s No. 2 oil consumer support prices.
Oil prices rose on Wednesday, with market participants expecting demand to rise in China, the world’s largest crude importer, after Beijing announced it would relax monetary policy to try to stimulate economic growth.
Oil prices slipped on Tuesday as concerns eased about the fallout from Syrian President Bashar al-Assad’s overthrow, but the market found support in China’s vow to ramp up policy stimulus, which could boost the top global crude buyer’s demand.
Buying into the yellow metal was fueled largely by increased haven demand, after rebel forces took over Syria’s capital Damascus and ousted President Bashar al-Assad, who fled to Russia.
The group, known as OPEC+ and responsible for about half of the world’s oil output, was planning to start unwinding cuts from October 2024, but a slowdown in global demand – especially in China – and rising output elsewhere have forced it to postpone the plan several times.
Oil prices were mostly stable on Thursday ahead of an OPEC+ meeting later in the day, with investors waiting to see what the producer group would do next on supply cuts while also monitoring geopolitical tension in the Middle East.
The yellow metal saw some relief this week as fears of a collapse in the Israel-Hezbollah ceasefire also spurred haven demand. But any gains in gold were largely limited by a spike in the dollar, as the greenback soared on uncertainty over the long term outlook for U.S. rates.
OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, has been looking to unwind production cuts by the first quarter of 2025. However, the outlook for surplus supply has put pressure on prices. The group accounts for about half of the world’s oil production.
